Azerion publishes Interim Unaudited Q4 and FY 2022 Results
28 Feb 2023 07:00 CET
Issuer
AZERION GROUP N.V.
Delivery on 2022 targets with profitable growth outlook
Highlights of Q4 2022
Delivery of 2022 targets. Full year 2022 Net revenue of EUR 453 million (guidance of at least EUR 450 million), with Adjusted EBITDA of EUR 52 million (guidance of at least EUR 50 million), reflecting almost 10% organic growth in 2022.
Record performance in the Platform segment, driving Q4 2022 Net revenue of EUR 149 million, up from EUR 126 million in Q4 2021. Adjusted EBITDA of EUR 22 million, up by 14% compared to Q4 2021, reflecting improved platform efficiencies.
2023 outlook of around EUR 560 million Net revenue and at least EUR 75 million Adjusted EBITDA.
Highest direct sales results across the group, demonstrating the added value of local teams working hand in hand with clients to successfully advertise to their audiences.
Additional integrations with automated platforms such as Amazon DSP and Google Audience targeting, increasing our revenue from programmatic advertising.
Entered high-growth digital audio, enabling audio ad formats across the platform through the acquisition of Radionomy (Targetspot and Shoutcast).
Strengthened our position in the Metaverse by creating more partnerships with brands such as DB Sports and successfully selling out a collection of 1,300 unique rooms in Habbo X.
Selected Financial KPIs
Financial results (EURm) Q4 FY
Azerion Group1) 2022 2021 2022 2021
Net revenue 148.8 126.3 452.6 308.1
Gross profit 53.1 50.4 166.3 120.9
Operating profit / (loss) 8.9 5.4 (129.0) 8.4
Adjusted EBITDA 22.1 19.4 52.1 46.7
Net revenue growth % 17.8% 46.9%
Gross profit margin % 35.7% 39.9% 36.7% 39.2%
Adjusted EBITDA growth % 13.9% 11.6%
Adjusted EBITDA margin % 14.9% 15.4% 11.5% 15.2%
1) Reported figures relate to Azerion Group N.V. following the merger with Azerion Holding B.V.. See “Background information” for more details
Co-CEO Umut Akpinar said:
“This quarter we continued improving our Platform and expanding our geographical presence to gain market share and harvest the benefits of scale in 2023. We focused on helping our clients achieve better results for their campaigns through differentiated, engaging and innovative ad formats. We continued integrating our past acquisitions and optimising costs, and expect to generate annualised savings of over EUR 10 million in 2023. This strong performance has allowed us to achieve our financial targets for 2022 and gives us confidence to update our guidance for 2023 and beyond.”
Co-CEO Atilla Aytekin said:
“In 2022 we completed strategic acquisitions and simplified our reporting structure. Looking ahead, we will focus on growing our Platform capabilities, whilst balancing our growth with a prudent financial framework. We will remain actively working on our M&A pipeline and as we target a capital structure that is more aligned with market practice, we announced the intention to cancel the majority of our treasury shares. In addition, we will also increase our focus on deleveraging our balance sheet in 2023. ”
Financial overview
Net revenue
Net revenue for the quarter amounted to EUR 148.8 million, an increase of 17.8%, compared to Q4 2021, due to growth in the Platform segment. Full year 2022 Net revenue was EUR 452.6 million, compared to EUR 308.1 million in 2021.
Earnings
Adjusted EBITDA was EUR 22.1 million for the quarter compared to EUR 19.4 million in Q4 2021, an increase of 13.9%, driven by stronger contributions from the Platform segment, partially offset by lower Adjusted EBITDA from the Premium Games segment. Full year 2022 Adjusted EBITDA was EUR 52.1 million, compared to EUR 46.7 million in 2021.
The operating profit for the quarter amounted to EUR 8.9 million, compared to a profit of EUR 5.4 million in Q4 2021, reflecting various factors including increased Net revenue, contributions of acquisitions and reduced operating expenses.
Cash flow
Cash flow from operating activities in Q4 2022 was an inflow of EUR 20.0 million, Cash flow from investing activities was an outflow of EUR 14.8 million, mainly due to acquisitions. Cash flow from financing activities totalled an outflow of EUR 3.1 million. Full year 2022 cash flow from operating activities amounted to EUR 44.9 million, compared to EUR 24.0 million in 2021.
Capex
Azerion capitalizes development costs related to asset development, a core activity to support innovation in its platform. These costs primarily relate to developers’ time devoted to the development of games, platforms, and other new features. In Q4 2022 Azerion capitalized EUR 5.5 million, equivalent to 18.0% of gross personnel costs, which is broadly in line with previous quarters.
Financial position and financing
Our net interest-bearing debt*) amounted to EUR 176.1 million as of 31 December 2022, mainly comprising our outstanding bond loan with a nominal value of EUR 200 million (part of a total EUR 300 million framework) and lease liabilities with a balance of EUR 19.2 million less the cash and cash equivalents position of EUR 50.9 million.